Financial Statements of the Govt of NZ to Sept 2013

The Financial Statements of the Government of New Zealand
for the three months ended 30 September 2013 were
released by the Treasury today. These financial statements
are compared against forecasts based on the Budget
Economic and Fiscal Update (BEFU), released on 16 May
2013.

Financial Statements of the Government of New
Zealand for the Three Months Ended 30 September
2013

8 Nov 2013

The Financial Statements of
the Government of New Zealand for the three months ended
30 September 2013 were released by the Treasury today. These
financial statements are compared against forecasts based on
the Budget Economic and Fiscal Update (BEFU),
released on 16 May 2013.

Core Crown tax revenue of $14.4
billion was 1.1% higher than forecast, largely due to other
individuals’ tax and GST ($143 million and $108 million
respectively). While GST was relatively close to forecast,
continued strength in gross other persons tax and lower than
expected refunds have contributed to higher than forecast
other individuals tax. This improved performance was
partially offset by $113 million lower than expected
corporate tax, due to lower than forecast provisional
tax.

Core Crown expenses of $17.5 billion
were 1.4% lower than forecast. Delays in earthquake
expenses and treaty settlements ($88 million and $55 million
respectively) led to lower than expected expenses. Other
lower than forecast expenditure was spread across a number
of activities.

The total Crown’s operating
balance before gains and losses (OBEGAL) was a
deficit of $1.3 billion which was $382 million lower than
expected, largely owing to the stronger than forecast core
Crown tax revenue and lower than expected core Crown
expenses.

Gains on the Crown’s investment portfolios
were $781 million higher than expected, particularly the New
Zealand Superannuation Fund. In addition, actuarial gains
on the ACC outstanding claims liability arising from
discount rate changes, resulted in unforecast gains of $812
million. The better than expected core Crown revenue and
expenses result, alongside these stronger than expected
gains, were the key reason for the total Crown’s
operating balanceinclusive of gains
and losses recording a $539 million surplus, compared with
an expected $1.2 billion deficit.

At 30 September, total
Crown assets were $242.2 billion and liabilities were $171.7
billion. The Crown’s net worth
strengthened to $68.5 billion.

The core Crown operating
cash deficit was $2.8 billion. After taking account of
capital expenditure during the year, there was a
residual cash deficit of $3.7 billion at 30
September ($400 million below forecast). The cash shortfall
was funded through additional borrowing which pushed the net
core Crown net debt to $60.0 billion,
equivalent to 28.2% of GDP. Gross debt was
also close to forecast at $80.1 billion, or 37.7% of
GDP.

Year to
date

Full
Year

$
million

September2013Actual[1]

September2013BEFUForecast[1]

Varianceto
BEFU$m

Varianceto
BEFU%

June
2014BEFUForecast[2]

Core
Crown

Core
Crown tax
revenue

14,357

14,202

155

1.1

62,383

Core
Crown
revenue

16,035

15,718

317

2.0

68,382

Core
Crown
expenses

17,517

17,768

251

1.4

72,367

Core
Crown residual
cash

(3,706)

(4,106)

400

9.8

(6,886)

Gross
debt3

80,114

80,536

422

0.5

87,686

as
a percentage of
GDP

37.7%

37.9%

38.5%

Net
debt4

60,015

60,449

434

0.7

64,765

as
a percentage of
GDP

28.2%

28.4%

28.4%

Total
Crown

Operating balance before
gains and
losses

(1,285)

(1,667)

382

22.9

(2,033)

Operating
balance

539

(1,157)

1,696

146.6

358

Net
worth attributable to the
Crown

68,498

66,957

1,541

2.3

61,997

1
Using GDP for the year ended 30 June 2013 of $212,701
million (Source: Statistics New Zealand)2 Using
forecast GDP for the year ended 30 June 2014 of $227,892
million (Source: Treasury)3 Gross sovereign-issued
debt excluding settlement cash and Reserve Bank bills4
Net core Crown debt excluding student loans and other
advances. Net debt may fluctuate during the year largely
reflecting the timing of tax
receipts

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